Tag: personal loan

Are you someone holding on to massive credit card 
debts or personal loan debts and do not know how   to pay it off? Are you also someone who spends 
frivolously on shopping, going on numerous trips   and buying stuff? Are you the person who's kind of 
worried right now and do not know what to do with   all your debts piling up? No worries, I understand 
how you feel. I too was that person. Today's video   is about how I went from being in massive credit 
card debt to paying it all off in three years   and these are the three secrets you must know. Hey 
there, if you're new to our Channel I'm Fran. I'm   a one-half of the Corporate Breakout Couple and 
together with my husband John, we broke out of corporate   in year 2020 at the age of 40 years old.

Please 
Like And Subscribe to our Channel so that you   don't miss out on any of our videos and it also 
helps with the YouTube algorithm. Thank you! [Music]   So the first thing that you need to know about 
me is that in the past, I wasn't very good with   personal finance even though I held a business 
degree. I didn't truly understand how money really   works and talking about numbers scares the crap 
out of me. And the thing is I always found that   money always came very easy to me even from my 
childhood all the way into my early 20s. Therefore   I always spend like there's no tomorrow and had 
very little savings. If you've been following us   for a while, in our other videos I did share 
that in my early 20s to my 30s I earned a lot   of money and at the same time I also did share 
that I hated being an employee so in my mid-20s   I started a bikini company with an ex colleague 
of mine and remember because I had very little   savings, I actually took out a personal loan 
to fund the bikini business.

Therefore in my   mid-20s I had a five digit personal loan. I also 
had a car installment loan and I had started to   rack up a little bit of credit card debt. A year 
later my business partner and I, we wrapped out   the bikini business even though the business is 
profitable. I wanted out of the business because   I didn't really enjoy the nature of the industry 
but guess what? What I did was I took my share of   the profits and I spent it all instead of paying 
off my personal loan. And around the same time I   had a promotion. I went from being an individual 
contributor with a huge commission scheme to   managing a team. My basic salary actually went 
up, my commission structure went down because   if my team didn't perform well, then I'll earn 
less.

So therefore my annual salary did decrease   a little bit but actually my spending did not. 
Therefore I found that I could not pay off my   credit card bills in full anymore and that's 
where my credit card debt started to stack up.   So slowly, my credit card debt went from a four 
digit to a low five digit to a mid-range five   digit figure and scared the crap out of me. 
And fortunately not long after that, I received a   job offer in Singapore so I decided to take 
the job in Singapore because of the fantastic   exchange rate. Long story short, I thought the job 
in Singapore would solve all my debt problems. So did all my debt problems go away? Of course 
not! Because after I settled my Malaysian credit   card debt, guess what? I had now Singapore 
credit card debts. So what happened? Well I   went to Ritz-Carlton's famous champagne brunches 
often and it didn't help that I worked at Orchard   Road so I went shopping often, sometimes on my 
lunch breaks. I knew my spending was getting   out of control but I just didn't know how to 
stop. I signed up for a three-day millionaire   mindset course in Singapore and I even paid a 
lot of money for a VIP ticket and I sat right   in the front.

In one of the exercises, they 
asked us to write down the age at which we   would like to retire and how much money we 
would need. So this was in back in 2010, so I   was 30 years old and I wrote that okay I'd like 
to retire at the age of 50 years old and I need   an amount of Singapore dollars three million 
dollars in order to retire. So I looked at the   paper with the three million dollars written 
on it. I thought about how much debt I was in   and then I balled up the piece of paper and 
I threw it away. I didn't even bother to go   back to the course to finish it because in my 
mind, I was thinking there's no way I would be   able to save up that much that amount of money 
in order to retire so I just gave up all hope.   Therefore I continued my merry way of spend spend 
spend spend spend. Now about two years later, I was   fortunate enough to meet John. He sat me down and 
he crafted out a financial plan for me to get out   credit card debt.

By the time, I was holding a mid 
five figure credit card debt in Singapore dollars. When I first met Fran, I wanted to help her 
clear her credit card debts so that we can then   come together and put our finances to work. So we 
came together, we put out a plan, we evaluate the   numbers and we came up with a three-year plan 
to help her to clear her debts. In the plan, it   includes a timeline, what's the repayment amount 
and what's your expenses and all the breakdowns   that we need to evaluate. We looked at each 
expense starting from the highest which is   her rent at the point of time. I was staying on my 
own and she was paying rent so it doesn't make   sense for her to pay as well. So we consolidated 
our costs and made sure that every dollar that   we spend on is put to good work. So after three 
years, I paid off all my credit card debts. Yippee! Now of course, during that time as well I invested in a lot of self-awareness courses which also made me   understand myself more and where did all 
my money problems come from.

My getting   out debt journey certainly has been an 
interesting one and very educational so   here are three secrets that you must 
know in order to get out of massive debt. Secret number one your money beliefs. As a human 
being, we all have beliefs about everything. For   example, about success, beliefs about failure, 
beliefs about starting a business, beliefs   about employees, employers, about relationships and 
mot certainly beliefs about money. When I evaluated   my own money beliefs, I realized that my belief 
about money was easy come easy go. Therefore I   had no qualms about spending every single dollar I 
had because my belief was when I spend it all, more   will just suddenly come.

When I changed my belief 
about money from Easy Come Easy Go to money is a   tool that I'm going to use to get me 
out of debt and become eventually financially   free, that was when everything changed for me. So 
my question to you is what are your money beliefs? Secret number two having purpose for your money.   Back then I had no purpose for my money. What was 
I even saving for? I didn't know. So I had all that   money sitting in my bank account, I might as well spend it right? Now however, it is different. Every dollar   represents Time Freedom.

It means that I do not 
need to go to work to exchange my time for money.   I now appreciate every single dollar that I 
have in my bank account because this money   is working hard for me. My question to you now 
is what is your purpose for saving up money? The third and final secret is being Financial 
Literate. So many of us are financially ignorant.   That's because schools don't teach us financial 
literacy. Money is something that everyone   uses and yet it is not taught to us. We're just 
expected to go into the world and ultimately we   ought to know how money truly works and how we can 
use it to our benefit. I really need to give credit   to John because he really taught me on how the 
financial system works, how the banks really work   and how we can use money to our benefit and how 
money can truly work for us. Over the years, I also   signed up for financial courses that taught me 
how to invest my money properly with proper risk   management put into place.

Now my question to you 
is are you willing to put in the work to educate   yourself to be financially literate so that you 
can get out of debt and hopefully be on your way   to Financial Freedom? Thank you for listening to me 
share my financial story and watching this video. I  hope this video has been educational and beneficial 
to you. Please Like and Share this video to   your friends and family. You never know who 
could actually gain from watching it. Please   Subscribe to our Channel for more such 
videos and we'll see you soon. Bye! [Music].

As found on YouTube

Meet Tom. Tom is a few years out college with a great
job and a lot credit card debt. Tom just watched our first video, “How to
Get Out of Credit Card Debt – Part 1”, so he understands that balance transfer credit
cards are a good debt management solution. Unfortunately, he just can’t qualify for
one with a big enough credit line. What should he do? Well, Tom’s not out of luck. He can instead use a personal loan pay off
his remaining credit debt. Personal loans are great. They come with fairly low credit score requirements,
generally around 640, and have interest rates lower than almost every credit card. Not only that, most modern personal lenders
will allow you to check your rates for free, without hurting your credit score.

In the end, these loans actually only have
one caveat, you just have to be sure their one-time setup costs are less than the interest
you’ll save by transferring. If this sounds confusing to you, don’t worry. We do the math for you on our website, plus
we teach you everything else you need to know in our video “Personal Loans 101” Finally, even if personal loans doesn’t
work, there are still a few more last resort options beyond asking your friends and family
for money: Option One: You could use the money from your
retirement accounts, like a 401(k) or an IRA. However, this option is problematic, as any
withdrawal before age 59 and a half with be subject to a 10% penalty, plus taxes, not
to mention raiding your retirement account is generally a bad long-term move.

Option Two: You could use a 401(k) loan, in
which you can borrow up to 50% of your current 401(k) contributions as a loan, up to a maximum
of $50,000. This definitely has advantages: there’s
no credit check, plus the interest rate will almost certainly be better than your credit
card. However, there are serious flaws to this loan
as well: not only are you prohibited from contributing to your 401(k) while the loan
is active, but if you leave your job, willingly or not, you’ll have only 60 days to repay
the loan, otherwise it’s considered an early withdrawal. Finally, we have Option Three: You could use
a HELOC, which is a revolving line of credit like a credit card, just much larger and secured
by a house. Again, this has advantages, mainly a lower
interest rate, but this is balanced by a major flaw: unlike a credit card, failure to repay
a HELOC can result in losing your home.

Finally, if none of our proposed solutions
have solved your problem, we highly recommend contacting the National Foundation for Credit
Counseling, or NFCC. They’re a nonprofit whose goal is to help
you avoid bankruptcy. To this end, they’ll create a personalized
payment plan for you and work with your lenders to both reduce your debt load and interest
rate. Hopefully you and Tom now have a better idea
of how to get out of credit card debt. If you want to see our balance transfer card
recommendations, your free credit score, or just more educational material, be sure to
check out our website!.

As found on YouTube

Meet Tom. Tom is a few years out college with a great
job and a lot of credit card debt. He wants to get out of debt, but isn’t quite
sure how, especially because he didn’t qualify for a good enough balance transfer card, detailed
in our two-part video series “How to Get Out of Credit Card Debt”. While Tom may think all hope is lost, there
is another way: personal loans.

However, before we continue, if Tom doesn’t
have a firm understanding of what a loan is, or how to effectively use one, we highly recommended
watching our two videos “Loans 101” and “Loans: Mistakes and Best Practices” before
continuing further. But let’s get back to the matter at hand. What is a personal loan? Well, like most loans, personal loans offer
Tom a fixed amount of money at a certain interest rate for a set period of time. However, unlike most loans, personal loans
can be used for a wide variety of expenses, ranging from home improvement projects to
paying off credit card debt.

Speaking of credit cards, personal loans,
especially those from online lenders, will have interest rates lower than almost every
credit card. In addition, if Tom borrows from an online
lender that considers not just his credit score, of which he’ll need at least a 640,
but also his education status and earnings potential, those interest rates can be even
lower. Plus, even better, applying for a personal
loan from an online lender couldn’t be easier. All Tom needs to do is fill out a short credit
application. Then, the lender will likely use a “soft
pull” for his credit history, which won’t hurt his credit score, and within a few minutes,
Tony will be able to see the amount see can borrow and the APR he qualifies for, a process
he can then repeat at multiple online lenders. Should Tom instead choose to get personal
loan from an offline lender, like a big bank or credit union, which just have one warning.

These institutions tend to have higher interest
rates due to their much greater overhead, plus they tend to avoid “soft-pulls”,
which makes it harder to check your rates without hurting your credit score. So let’s assume Tom has chosen to get a
personal loan through an online lender. What’s his next step? Well, assuming he’s chosen his lender and
has checked his rates, he can then fill out the actual loan application online.

This should be very simple process, but there
is one thing to watch out for. Online lenders often charge a nonrefundable
origination fee for creating the loan, generally ranging between 1-5% of the loan’s value. This generally means two things:
One: If Tom wants to borrow exactly $10,000, and has to pay a 1% origination fee he’ll
need to borrow $10,100 dollars instead. Two: If Tom wants to use the loan proceeds
to pay off credit card debt, he needs to make sure the origination fee is less than the
interest he’ll save by using a personal loan. And don’t worry, our online calculator makes
this process a breeze. Finally, assuming the math checks out, Tom
just needs submits his application.

At this point, there will be a hard credit
check, but assuming Tom is approved, his bank account will generally be funded within a
few days. Tom is now on his way to being debt free. Congratulations! You’ve finished our personal loan basics
curriculum! If you want to see our free recommendations
for personal loan lenders, or just check out more educational material, be sure to check
out our website!.

As found on YouTube

Do you currently have credit 
card debt? Are you trying to   pay it down…but it seems like somehow 
you just keep getting deeper into debt? Throughout our many years in banking, we’ve worked 
with a lot of clients in the same situation.   So today, we’re going to discuss the best 
options for paying down credit card debt.   First, we’ll talk about why a balance transfer is 
one of the best weapons in a war on debt. Then,   we’ll discuss personal loans and how they work. 
Finally, we’ll wrap up by reviewing a few options   that might be helpful to someone who isn’t able to 
qualify for a balance transfer or a personal loan.

Hello everyone, this is Luis with Herobanker.com 
and we’re you’re friendly neighborhood bankers. Debt comes in all forms and sizes. Some debt, 
like a mortgage or a car loan, can be beneficial.   But other debt, like credit card debt, can 
feel like a huge weight on your shoulders.   This is especially true if 
you’re only making minimum   payments and the amount that you 
owe is going up instead of down. So, if you’d like to find out the best options for 
dealing with credit card debt, let’s get started. Option #1 is a credit card balance transfer. 
With a balance transfer, you’ll be taking the   total amount that you owe…and moving that balance 
over to another credit card, with a lower interest   rate.

The reason why this is beneficial 
would be best explained with an example: Sally currently has a credit card with 
ABC Bank. Her balance on that credit   card is $10,000 and the interest 
rate that she’s paying is 20%.   This means that every year, Sally will incur 
about $2,000 in interest charges on that card. Now, this doesn’t necessarily mean that Sally 
will pay $2,000 in interest charges for the year.   Because if Sally is only making the minimum 
payment every month, then she’s not even   paying down what she owes. So, in this case, Sally’s 
total debt would be going up instead of down. This is a major factor in how many people end 
up down the rabbit hole of credit card debt.   We highly advise against making minimum 
payments, when possible. Now obliviously,   things happen and sometimes the only 
option is to make the minimum payment.   But if this is the case, then we need to 
understand that paying high interest on   a credit card, is probably not the best 
way to handle our debt in the long term.

So, what do we do? Well, this is 
where a balance transfer can help.   Remember, Sally has a credit card with ABC Bank.   She currently owes $10,000 on that card 
and she’s paying an interest rate of 20%. Thankfully, Sally comes across a Balance 
Transfer Credit Card from XYZ Bank.   XYZ Bank is offering Sally a new credit card. This 
card comes with an offer of 0% APR for 12 months   on balance transfers. So, if Sally accepts this 
offer, this means that she’s opening a new credit   card with XYZ Bank, with a 0% interest rate for 
12 months. The $10,000 credit card balance that   is currently with ABC Bank can now be transferred 
to XYZ Bank, at a much lower interest rate. So, instead of paying 20% on her old 
credit card she now has 12 months of   0% on the new credit card. Remember, 
Sally would have incurred about $2,000   in interest if she had continued to pay 
20% on her prior card. But with this   new card she’ll pay 0 dollars in interest for 
12 months because for 12 months her APR is 0%. Paying $0 instead of $2,000 over the same 
amount of time sounds too good to be true,   right? And this is why a balance transfer 
can be a very valuable tool in your   financial toolbox.

When used properly a 
balance transfer can save you hundreds,   if not thousands, of dollars…and because 
you’re not paying interest during the   promotional timeframe, this makes it 
easier to actually pay down your debt. Now, the new credit card will most likely 
charge what’s called a Balance Transfer   Fee. This means that you’ll
pay a small fee in order to process   the balance transfer. Some of you may be 
thinking, I knew there was a catch! Well,   not really. Because the typical balance transfer 
fee is only 3-5%. So, let’s do the math on that. Remember, in one year, Sally would have incurred 
$2,000 in interest on her prior card. But a 3%   balance transfer fee on a $10,000 transfer is only 
$300. So, over a one-year period, Sally would save   about $1,700 by doing a balance transfer…and 
that is the power of a balance transfer.

A balance transfer can also be used 
to payoff multiple credit cards,   not just one. So, if you owe money on three 
cards, you can do a balance transfer for   each card. This will consolidate 
all three of those cards into one. Most balance transfers will also allow you to 
transfer other debts, like a personal loan,   as well. So, it’s usually not 
limited to just credit card debt. One final note on balance transfers is 
that sometimes they can be done   on one of your existing credit cards. So, if 
you have money available on a credit card,   then your card provider may reach out 
to you with a 0% APR Balance Transfer   offer.

These are sometimes sent 
to you via postal mail and e-mail. Before we move on, if you’d like more info about 
Balance Transfers and interest on credit cards,   check out Herobanker.com. We’ve included links 
to these pages in the video description. Also,   if you’re enjoying the content, we would greatly 
appreciate it if you can hit that subscribe button.   That way, we can keep you updated on 
banking, finance, the economy, and more.

Ok, the second option for dealing with credit card
debt is a personal loan. A personal loan allows   you to borrow money for a specific purpose, such 
as debt consolidation. Once the loan is approved   and funded, your existing debt will be paid off 
and consolidated into one new loan. You will then   repay that loan with monthly installment 
payments, until the loan is paid off. The   payment on this loan will have a fixed interest 
rate and a fixed payment amount every month. So, a personal loan might look something like 
this: George takes out a $10,000 personal loan.   The loan has an APR of 15% with a 5-year term. 
This means that George will make a monthly   payment of $238 for the next 5 years. 
After that, the loan will be paid off.

You can think of a personal loan 
as similar to an auto loan. But,   instead of the money being used to buy a car, 
you’ll be using the money to consolidate debt. Ok, now let’s discuss some of the 
pros and cons of a personal loan. One benefit is that with a personal loan you 
will have one fixed monthly payment. This   usually makes it easier to pay off debt. 
Also, you will probably pay off your debt   quicker and pay less interest. Remember, with a 
credit card, it’s easy to fall down the rabbit   hole of only making minimum payments…and 
doing this does not actually lower the   amount that you owe. In fact, this can often 
cause the amount that you owe to increase.   But with a personal loan, the amount that 
you owe will immediately start to decrease. This brings us to one of the cons of a personal 
loan. With a personal loan, you might have a   higher monthly payment than you’re used to. This 
is especially true if at the moment, you’re only   making minimum payments on your credit card.

For 
example, let’s say you have three credit cards and   the minimum payment on each card is $25 per month. 
In this case, you’re only making total payments of   $75 per month. But if you consolidate that debt 
into one personal loan, then your monthly payment   will probably be higher than $75 per month. This 
is because the monthly payment on a personal loan   is a principal and interest payment. But with a 
credit card, those $25 minimum payments are mostly   going towards the interest owed, and not the 
principal balance. Again, think about a personal   loan like an auto loan. These loans tend to 
have higher monthly payments than a credit card. Another drawback of personal loans is that the 
interest rates tend to be on the higher end. Also,   some personal loans can charge fees that can
get pretty high. The interest rate and   the fees will usually vary, depending 
on your credit and other factors. Someone with good credit, high income, and 
low debt, will probably be looked at as a   more credit-worthy borrower. This usually 
means a lower interest rate and no fees.   However, someone with bad credit, low income, 
and a lot of debt, will probably be looked at as   a less credit-worthy borrower.

This usually means 
higher interest rates and relatively high fees. So, you might see that ABC Bank offers personal 
loans with an APR as low as 9.99%. But remember,   it’s likely that the only people who 
will be approved for that low rate,   are people with good credit, high income, and 
low debt. Someone will bad credit, low income,   and high debt will probably get a higher interest 
rate. Every lender is different.

Some lenders   cater to borrowers with good credit. While other 
lenders cater to borrowers with bad credit. Usually if a lender caters to borrowers 
with good credit, they will not charge a   fee. Or, the fee will be small. But if a lender 
caters to borrowers with bad credit, then those   lenders tend to charge fees that can get pretty 
high. The most common fee is an origination fee,   which is a fee for processing the loan. This fee 
is usually a percentage of the total loan amount. So, let’s say on a $10,000 loan 
that the origination fee is 5%.   This means that the lender will charge you $500 
and then give you $9,500…with the $500 deduction   being the origination fee. Obviously, this eats 
into your total amount received, which is not   great. But unfortunately, for someone with poor 
to fair credit, this might be the only option. Before we wrap up personal loans, we’ll 
say this: personal loans can be tricky.   Oftentimes if you really need a personal loan, 
then it can be tough to qualify for one. This is   because if you’re in need of a personal loan, then 
it’s likely that you’re already in debt…which a   lender is going to view as higher risk.

Therefore, 
this can make it more difficult to qualify. The third option for consolidating debt is 
probably the best option. But it requires   you being a homeowner. This third option 
is a Home Equity Loan or Line of Credit.   This means that you’re taking out a loan 
against the equity in your home. We won’t   get into all the specifics of how this works, 
because that would require a video of its own. But basically, if you have equity in your 
home, then you can take out a loan against   that equity. The biggest benefit of doing this is 
that you will probably secure the best interest   rate possible for a loan or line of credit.

This 
interest rate will likely be much lower than the   interest rate for a personal loan. This is because 
banks really like it when you borrow against your   home…because people are less likely to default 
on a loan, when their home is used as collateral. One drawback to a home equity loan is 
that they often take a longer time to   process. Depending on the lender, the process 
usually takes a few days to a few weeks.

So,   if you need the money fast, then this might 
not be the best option. Another potential   drawback is that you’ll be borrowing against 
your home, which some people might not like. Ok, so those are three of the best 
ways to to deal with credit card debt. If none of   these options work for you, then there 
are a few other options.

These are not   options that we necessarily recommend, 
for a variety of reasons. But if all   other options have been exhausted, then 
these may be worth taking a look at.   So, we’ll just list these options quickly. But 
before we list them, we also suggest making sure   that you’ve come up with a debt management 
plan first. This should involve lowering   your expenses, if possible, and also having 
a long-term plan for how to handle your debt. Ok, so these other options include: Number One: Debt settlement programs – These are 
somewhat similar to debt consolidation loans,   but they also have differences. Some non-profit 
companies will offer debt consolidation loans   with certain limitations or contingencies. Other 
companies will offer debt settlement programs.

They   may work with your creditors to lower the amount 
that you owe. However, this option can be costly,   messy, and time-consuming. Also, this option is 
almost certain to negatively impact your credit. Number Two: 401k or Pension – If you have a 
401k, then you may be able to withdraw money   or take out a loan out against it. This often 
comes with penalties and tax implications.   So usually, this is not something we 
advise doing for debt consolidation,   unless other options have already been exhausted.   Also, if you’ve recently left a job, then you 
may be able to withdraw from a pension. However,   not all companies offer a pension, and this can 
also come with penalties and tax implications. Number Three: Auto Equity Loan – If 
you have equity in your vehicle,   you may be able to get a loan against the equity. 
This is similar to a home equity loan.

However,   keep in mind that you’re using 
your vehicle as collateral. So,   if you can’t make the loan payments, then 
it’s possible that your car can be taken away. Once again, these are all options 
that we wouldn’t usually recommend,   unless other options have first been exhausted. Ok, so that’s our conversation about some 
of the best ways to deal with credit card   debt. We hope the information was helpful 
and easy to understand. We’d love to hear   any questions or comments that you might have. 
Have you recently consolidated your debt? If so,   what method did you use and how’s it 
working out? Or, would you like us to   drill down further on anything that we discussed today? Thank you again for taking time out 
of your day so that we can help you   become your own financial hero! 
We hope to see you again soon.

If you’d like to see more content like this,   we would greatly appreciate a 
LIKE and SUBSCRIBE! 🔔 Thank you!.

As found on YouTube

Meet Tom. Tom is a few years out college with a great
job and a lot credit card debt. Tom just watched our first video, “How to
Get Out of Credit Card Debt – Part 1”, so he understands that balance transfer credit
cards are a good debt management solution. Unfortunately, he just can’t qualify for
one with a big enough credit line. What should he do? Well, Tom’s not out of luck. He can instead use a personal loan pay off
his remaining credit debt. Personal loans are great. They come with fairly low credit score requirements,
generally around 640, and have interest rates lower than almost every credit card.

Not only that, most modern personal lenders
will allow you to check your rates for free, without hurting your credit score. In the end, these loans actually only have
one caveat, you just have to be sure their one-time setup costs are less than the interest
you’ll save by transferring. If this sounds confusing to you, don’t worry. We do the math for you on our website, plus
we teach you everything else you need to know in our video “Personal Loans 101” Finally, even if personal loans doesn’t
work, there are still a few more last resort options beyond asking your friends and family
for money: Option One: You could use the money from your
retirement accounts, like a 401(k) or an IRA. However, this option is problematic, as any
withdrawal before age 59 and a half with be subject to a 10% penalty, plus taxes, not
to mention raiding your retirement account is generally a bad long-term move.

Option Two: You could use a 401(k) loan, in
which you can borrow up to 50% of your current 401(k) contributions as a loan, up to a maximum
of $50,000. This definitely has advantages: there’s
no credit check, plus the interest rate will almost certainly be better than your credit
card. However, there are serious flaws to this loan
as well: not only are you prohibited from contributing to your 401(k) while the loan
is active, but if you leave your job, willingly or not, you’ll have only 60 days to repay
the loan, otherwise it’s considered an early withdrawal. Finally, we have Option Three: You could use
a HELOC, which is a revolving line of credit like a credit card, just much larger and secured
by a house. Again, this has advantages, mainly a lower
interest rate, but this is balanced by a major flaw: unlike a credit card, failure to repay
a HELOC can result in losing your home. Finally, if none of our proposed solutions
have solved your problem, we highly recommend contacting the National Foundation for Credit
Counseling, or NFCC.

They’re a nonprofit whose goal is to help
you avoid bankruptcy. To this end, they’ll create a personalized
payment plan for you and work with your lenders to both reduce your debt load and interest
rate. Hopefully you and Tom now have a better idea
of how to get out of credit card debt. If you want to see our balance transfer card
recommendations, your free credit score, or just more educational material, be sure to
check out our website!.

As found on YouTube

In today's video I'm going over how to
consolidate credit card debt with three proven ways because if you guys do have
credit card debt I want you to get out because even if you've got just a little
bit of credit card debt that still sucks because you're gonna be paying interest
on it but the real big problem is when you have a ton of credit card debt and
that's because you'll be spending a ton of money on interest and on top of that
you're gonna be jacking up your credit utilization score as well so in this
video I'm gonna teach you how to consolidate credit card debt but I'm
also gonna teach you why you should do it in the first place and if you just
found this channel I'm Jason with honest finance and I make a lot of videos on
different topics that'll give your life and your finances more value so feel
free to subscribe if you guys want to or just give this video a like
but now let's start talking about debt consolidation now before I start talking
about how to consolidate credit card debt I first need to go over why you
should do it in the first place because there's mainly two reasons why you need
to get out of credit card debt and the first reason is called your credit
utilization score this controls 30 percent of your credit score which is
255 points and it all has to do with how much you're spending on your credit
cards versus how much their limits are so basically if you've got three credit
cards with a total spending limit of $20,000 but you spend $8,000 during the
month then your credit utilization score is gonna be 40% which is not good now
I'll explain why it's a bad thing in just a second but in order to do the
math all you do is take 8,000 divide it by 20 thousand and then that gives you
your utilization score you want your utilization score to be below 15%
because that's going to give you the biggest boost to your credit score and
if you can get the score between 1 and 5 percent then that's going to be the
absolute best utilization score that you can have towards your credit score and
obviously if you have a ton of credit card debt then your credit score is
always going to suffer because of the bad utilization score and if you do want
to know more about how your credit utilization score works then you can
watch this video up here where I'll teach you quite a bit more about it so
if you want to improve your credit score then you're gonna have to get rid of
your credit card debt and maybe one of the only ways you can do that is through
consolidation now the second reason why you should consolidate your credit card
debt is simply because of how much the interest is actually costing you I mean
let's say that you owe $10,000 on all your credit cards and the average
interest rate is 22 percent well with those numbers you're going to be wasting
about a hundred and eighty dollars in interest
per month just based on a $10,000 balance but if you consolidated all of
that debt into just one loan that was 8% then you're only gonna be paying about
$65 a month in interest which is so much better now those are the reasons why you
should definitely get out of credit card debt but now I want to talk about how to
get out of credit card debt so let's get started on that and if you've made it
this far into the video could you please just comment down below and say I'm
still here that way I still know who's watching the video
Thanks the first way to do it is just by taking out a debt consolidation loan and
then paying off your credit cards and then you'll just have one monthly fixed
payment now highly advise that you only do this if you get a good rate and terms
and then you make sure that you pay off your credit cards and you never go back
into the credit card debt again because if you just keep your same spending
habits then you're gonna rack up another credit card balance and you'll be paying
off the loan at the same time so just take my advice and stop all of your bad
spending habits and get out of debt for good now as far as lenders go you can
check with your local credit unions or you can check online for some of the
best rates and just stick with reputable lenders because there are a lot of
really bad personal loans out there and I don't want you guys to get into any of
those I especially don't want you guys paying any origination fees because
those can actually be up to 5% of the total of the loans value that you have
to pay up front right when you get the loan so let's just say that you take out
a personal loan for $10,000 with a 5% origination fee well you're gonna have
to pay an instant 500 bucks and then when you actually take out the loan it's
only gonna be for ninety five hundred bucks all because of the stupid
origination fee a lot of the big lenders even charge origination fees like
prosper and Lending Club so I would definitely recommend going with someone
that doesn't charge an origination fee because it's just a waste of money
that you don't have to pay I'd recommend checking out light stream loans for debt
consolidation because they've got some of the best rates in the industry and
they don't charge any fees they don't have any dirty origination fees and they
don't have prepayment penalties as well they'll also beat any competitors rate
for the same loan by a tenth of a point so you'll always know that light stream
is gonna have the best rates from anyone now I'll leave an affiliate link in the
description which means I may be compensated if you click through it but
just keep in mind that I want you guys to check out light stream loans because
I'm only gonna recommend companies that I think are the best value for you now
the next way you can consolidate credit card
is by actually finding a new credit card with a zero percent balance transfer
offering because that way you can move all of your debt into the new card and
pay zero percent interest they'll usually give you about twelve months
with zero percent interest so it's a really good way to just quickly tackle
your credit card debt but there are some cons to it as well for instance you'll
most likely have to pay an upfront 3% balance transfer fee which is just a
total waste of money and then on top of that your credit utilization score is
still gonna suck because you're just moving the debt on to another card so
honestly it's not always the best option to move your debt from one credit card
onto another credit card but it is a solution if they offer the 0% transfer
and that's because if you've got a little bit of credit card debt at 0%
interest for 12 months then you probably have enough time to tackle the debt and
then not worry about it ever again now last time I lists of debt consolidation
is called cash out refinancing what this means is that you can either refinance
your car or your house and you can actually take some of the equity that
you've built up in them and then you can use that as a cash out refinance so that
you can pay off your credit cards so if you refinanced your car for $20,000 but
it was actually worth $30,000 then you could actually take some cash out on the
loan and make it a little bit bigger like 25,000 and then you can use that
extra money to pay off your credit cards this is a great way to get rid of credit
card debt because the interest rates probably gonna be a lot cheaper than it
is on a personal loan but I would still warn that you're taking money out
against your equity which is not a good thing because if you take out money from
your built up equity then you're just gonna owe more in that particular item
just to pay off your credit cards and on top of that you've still got to go
through the hassle of refinancing and trust me if it's a home just the closing
costs alone are not going to be worth doing that option so I would only look
into this option if you were gonna refinance anyway and then you can pay
off your credit cards at the same time now these are the ways that I'd
recommend you guys can use to get out of credit card debt there are definitely
more ways that you guys can do it but these are the three ways that I would
recommend trying first because they work credit card debt totally sucks but you
can get out of the hole if you consolidate responsibly just pay off the
debt and make sure that you don't get into the same situation a second time
once again I'm Jason with honest finance and I make a lot of videos on different
topics that will give your life and your finances more value so feel free to
subscribe if you want to or you can check out some more of my videos here
that's all

As found on YouTube

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